ACC can be cheaper says Caygill

By BRIAN FALLOW

WELLINGTON - ACC says it can provide the workplace accident cover the law prescribes more cheaply than the private sector is doing.

"We are well aware of employer concerns about price and service," ACC chairman David Caygill told a news briefing yesterday.

"The challenge for us will be to make sure we can match or better the private sector premiums. That's the main priority we have set ourselves."

The regulator overseeing the privatised accident insurance market estimates that employers are paying an average $1.20 for each $100 of wages.

That is for the basic coverage in which the insurer bears all the risks of meeting the statutory requirements.

Actuaries Melville Jessop Weaver estimates the average premium at $1.26.

ACC chief executive Garry Wilson said ACC actuaries estimated it could provide the same cover and meet its costs for an average premium of $1.08.

As well, the cost of the "tail" - the continuing cost of past accidents - is falling, to 40c in each $100 of wages next year from 67c this year.

Legislation already before Parliament will reinstate ACC's monopoly in providing workplace accident insurance from April 1.

Still on the drawing-board are plans for a new accredited employers' scheme for larger employers.

A comprehensive ACC bill, to be introduced to Parliament mid-year, is expected to include lump-sum payments, permanent pensions and a widening of injury prevention programmes.

The re-nationalisation of ACC is not expected to bring back the jobs of 150 branch staff laid off over the past year.

Mr Wilson said he hoped to be able to absorb the increased workload with an increase of no more than 20 or 30 staff. ACC now employs around 1300 people.

Mr Caygill said: "We won't be back to the same size, let alone the same approach. There will be at least 3000 fewer claims under management, and another 2000 under third-party management."